The bill aims to clarify the business and occupation tax treatment of investment income derived from passive investment vehicles managed by individuals subject to business and occupation tax under RCW 82.04.290(1). It addresses uncertainties that arose following the state supreme court's decision in Antio, LLC v. Department of Revenue, which could lead to a restrictive interpretation of the deductibility of investment income. The proposed amendments to RCW 82.04.4281 include new provisions that allow for the deduction of amounts derived from investments made under an investment management or advisory agreement with a taxable person, while also affirming that this does not affect the tax obligations of those individuals.

Key amendments include the addition of a new subsection that specifies the types of investment income that can be deducted, such as amounts derived from investments made pursuant to an investment management or advisory agreement. The bill also clarifies definitions related to banking, lending, and security businesses, ensuring that the terms are well-defined for tax purposes. Importantly, the act is stated to apply retroactively, but it explicitly does not create a right for refunds on taxes paid for investment income prior to the effective date of the new provisions.

Statutes affected:
Original Bill: 82.04.4281